PCI fell 0.3 percent in April, suggesting the economic recovery may have stalled

Submitted by Norm Roulet on Wed, 05/12/2010 - 14:47.

Source: Ceridian-UCLA Pulse of Commerce Index


Ceridian reported today the Ceridian-UCLA Pulse of Commerce Index™ (PCI) fell 0.3 percent in April, suggesting the economic recovery may have stalled. "The latest PCI numbers are disappointing and cast considerable doubt on the strength of the recovery and the strength of GDP numbers for 2010," said Ed Leamer, the PCI's chief economist. Five of the nine US census regions were weak in April. With a decline of 1.7 percent, the PCI in Ohio's East North Central region fell the most.

Source: Ceridian-UCLA Pulse of Commerce Index

PCI is based on real-time diesel fuel consumption data for over the road trucking, and PCI serves as an indicator of the state and possible future direction of the U.S. economy.

From Ceridian: "What we are seeing with the PCI and hearing from our customers is that the economy is better than last year, but not great," said Craig Manson, senior vice president and index expert for Ceridian. "The economy appears to be in recovery, but the big question is by how much? The next two months will tell us a lot about the rest of the year."

Ed Leamer, the PCI's chief economist, reports "the next two months will tell if the first quarter's healthy consumer spending will help lift the PCI and propel stronger GDP growth for the year."

Reporting on this PCI release today, the Minneapolis Post writes: "With three months of no growth, the April PCI reflects the continuing weak labor market and early reports on April retail sales, consistent with a zero GDP quarterly growth outlook for the second quarter. “The optimism felt in the fourth quarter is not reflected in what we are seeing today,” Dooley said, and reflects “an evolution in our view.

Big surprise. After what Americans have been through since 9-11, to have any confidence in our leadership and economy has called upon citizens to make great leaps of faith... and that was before 4-20.

American consumers are just awakening with the world's citizens to the greatest tsunami of environmental disaster, global unrest and economic uncertainty imaginable, seeing and feeling the real-time damages caused by the BP Gulf Oil disaster, since April 20, 2010. Resulting from a disheartening lack of real global environmental and economic leadership in government and industry - still running the shows today - the waves of crises now confronting Americans, this nation and the world post-Deepwater kill all hopes for "healthy consumer spending" in America in the next quarter, and necessitate a SHOCK to our view of sustainability, the environment and economics in times of global ecological disaster.

America and the world are just starting to adjust to the shock that our Sunshine border - our Gulf oil - our moat - has been invaded and is bleeding openly, shamefully and painfully right now... and will be polluted forever. The longer the blood flows, the longer the adjustment required, up to the level of accepting total loss of much of the Gulf of Mexico ecology and economy, worldwide, impacting many nations and American states and 10,000,000s of people (not to mention gazillions of other life-forms). That will stagnate our economy, drive up our deficits, drain GDP, and tank disposable income and consumer spending in America and worldwide for quite some time.

Some industrial economists may be able to convince mainstream media that this is a red tide that lifts all boats - the oil will trickle down - pay no attention to that neutron bomb detonation behind the Paki - but SCADA doesn't lie.

From the Ceridian release on their April PSI Report:

The index is built by analyzing Ceridian's electronic card payment data that captures the location and volume of diesel fuel being purchased by over the road trucking operations, providing a detailed picture of the movement of products across the United States.

Don't blame the economists if their projections change from April to May, as most didn't forecast for an oil-spewing hole 20,000 leagues beneath the sea, which changes everything about the economy, for everyone.

I did, as I've forecast for global warming and expect such economy-changing disasters to occur daily, meaning to anticipate historic disruptions ending economic opportunity in super-regions impacting 1,000,000s in many nations - the Gulf Oil Disaster is just a tremor in what may be a complete etch-a-sketching of humanity - or it may be one of the great disasters that awakens enough people to care enough to make a difference to save the planet.

A good place to see where this may all be determined is in the oil pipeline, reflected in how much diesel fuel is flowing into trucks that move the US economy. When that is declining, the economy is declining. How much the decline becomes a result of shocks to the oil pipeline itself, over a mile beneath the sea, is yet to be seen. One place to look for valid indicators is the PCI, indicating the health of the economy that depends on what flows out the other end of the pipeline, at the pump.

We'll check back on the PCI in June - this data is as real-time as it gets...

The Ceridian-UCLA Pulse of Commerce Index™ is based on real-time diesel fuel consumption data for over the road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. By tracking the volume and location of fuel being purchased, the index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. Working with economists at UCLA Anderson School of Management and Charles River Associates, Ceridian provides the index monthly and also offers companies access to more detailed fuel-use information. Ceridian is a global business services company providing electronic and stored value card payment services and human resources solutions. UCLA Anderson School of Management is perennially ranked among top-tier business schools in the world. Charles River Associates is a leading global consulting firm that offers economic, financial, and business management expertise to organizations around the world.

SCADA stands for supervisory control and data acquisition. It generally refers to an industrial control system: a computer system monitoring and controlling a process.

Third generation: "Networked"

These are the current generation SCADA systems which use open system architecture rather than a vendor-controlled proprietary environment. The SCADA system utilizes open standards and protocols, thus distributing functionality across a WAN rather than a LAN. It is easier to connect third party peripheral devices like printers, disk drives, and tape drives due to the use of open architecture. WAN protocols such as Internet Protocol (IP) are used for communication between the master station and communications equipment. Due to the usage of standard protocols and the fact that many networked SCADA systems are accessible from the Internet, the systems are potentially vulnerable to remote cyber-attacks. On the other hand, the usage of standard protocols and security techniques means that standard security improvements are applicable to the SCADA systems, assuming they receive timely maintenance and updates.

Ceridian-UCLA Pulse of Commerce eNews
The April report and data for the Ceridian-UCLA Pulse of Commerce Index are now available. Visit www.ceridianindex.com for the latest news and commentary.

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    The Ceridian-UCLA Pulse of Commerce Index (PCI) is showing flat overall performance during the first four months of 2010, falling 0.3 percent in April and suggesting the economic recovery may have stalled, although consumer spending could drive a slow but steady recovery. Read more »

  • April PCI is Disappointing; Consumer Spending may Impact Future Results
    The April PCI adds a cautionary comment to a number of recent government releases that have suggested the goods component of the economy is experiencing a healthy recovery. The next two months will tell if consumer spending will help lift the PCI and propel stronger GDP growth for the year.
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  • Video Commentary
    Craig MansonChief Economist Ed Leamer and Ceridian's Craig Manson discuss April's PCI decline, the relation to the job market and regional impact. . View video »

  • How the Ceridian-UCLA Pulse of Commerce Index is Constructed
    Gain a deeper understanding of the data behind the PCI and the factors examined for the index. This white paper (PDF, 1629 KB) illustrates how the PCI was constructed and how the underlying data was analyzed. Read more »

  • Data Download and Analysis
    The Ceridian-UCLA Pulse of Commerce chart provides a detailed picture of index data, including a timeline of results starting 10 years ago, regional breakdowns and comparisons to the federal government's Industrial Production report. Read more »


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